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Thai AirAsia Growth Plan Faces Challenges
18th Feb 2017
Thai AirAsia (TAA) may have to rethink its plans for network expansion as there are currently no more domestic airports in Thailand that can accommodate its Airbus A320 aircraft. That is, all the major airports like Don Muang and Suvarnabhumi already handle Thai AirAsia’s A320s, while the “trunk routes”, such as Bangkok-Phuket and Bangkok-Chiang Mai are served at the current maximum capacity.
This all means that Thai AirAsia has nowhere to turn to expand its services in Thailand.
Okay, if not Thailand, what about the neighborhood? Well, no luck there for Thai largest low-cost carrier either. Right now it is very hard to find a destination in the neighboring countries that has good traffic potential and could be profitable for the airline.
In a way, TAA has itself and its perhaps overly aggressive expansion tactics in the past to blame for its current problems.
According to Thai AirAsia Commercial Director, Santisuk Klongchaiya, this presents a big problem for the airline. The LCC’s growth plan is to add 5 to 6 new Airbus A320 planes every year to its fleet, and should reach 56 by the end of 2017.
Mr. Santisuk also said that Thai AirAsia is looking to start regular flights to airports in Chumphon, Lampang, Mae Hong Son and Mae Sot, but to do that, these provincial airports will have to upgrade their facilities first. At the moment, these airports are capable of handling turboprop jets like the ATR 72-500, but not the larger aircraft as well.
He said:
We're prepared to fly to any airports capable of handling our jets, as we want to expand our network.
TAA Commercial Director ruled out the possibility of acquiring turboprop jets to operate at smaller airports in Thailand, saying:
That's not in our business model, as it's hard to establish economies of scale. We will stick to a single aircraft type, the A320.
This Wednesday, the airline announced it will launch two more routes from U-Tapao, Rayong to Phuket and Ubon Ratchathani. Both services will operate daily and will start on 30th March, this year.
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